Tech Companies to Pay Millions to Settle Wage-Fixing Lawsuit

In 2011, tech workers filed a class action lawsuit against Apple Inc., Google Inc., Adobe Systems Inc. and Intel Inc. The workers claimed that the four tech giants conspired together and agreed that they would not solicit each other’s workers. This agreement was designed to prevent a salary war that would inflate the wages of workers within the technology industry.

Reuters reports that the tech companies have now agreed to pay a total of $324 million to settle the lawsuit. The case was being closely watched because of the potential for a significant damage award. It also illustrates that employees in every field and every industry, even highly skilled workers, are at risk of potentially abusive and unfair behavior. Workers need to understand their rights and should consult with a Costa Mesa employment law attorney if they believe that they are being treated inappropriately or unfairly within the workplace.

Wage-Fixing Prohibited By Law

Tech workers who sued the four major companies reportedly planned to ask for as much as $3 billion in damages. However, because antitrust laws would have applied to the company’s behavior, the damages could have been tripled up to $9 billion.

The case was largely based on emails that had been sent by Steve Jobs prior to his death, as well as Eric Schmidt, the CEO of Google. The emails showed Jobs, Schmidt and rivals in Silicon Valley created a plan to avoid poaching prized engineers from each other.

In one email exchange, a Google recruiter had solicited the services of an employee from Apple. Schmidt informed Jobs that the recruiter would be fired for this action. Jobs forwarded the email to one of the top human resources directors at Apple with a smiley face added to the email.

Another email exchange included Schmidt advising discretion when a Google human resources director asked whether it should share the agreement not to recruit with competitors. He suggested sharing the information verbally, in order to avoid the creation of a paper trail that he could later be sued for.

Of course, the emails that did come to light were enough to lead to a lawsuit. Trial was scheduled to begin at the end of May and roughly 64,000 workers were involved as plaintiffs who may have been deprived of higher wages by the agreement that the tech companies entered into.

An Adobe representative commenting on the settlement indicated that the company denied wrongdoing but agree to be a part of the settlement to avoid the costs and distractions of litigation as well as the uncertainty of a trial. Some suggest, however, that the companies feared their emails would make them look unsympathetic to a jury and they were concerned about a large plaintiff’s verdict.

While the settlement provides some compensation for those who were affected, it can be difficult to put a dollar amount on just how much this unfair wage-fixing cost workers whose employment opportunities were limited by secret collusion among some of the world’s biggest companies.

Employment lawsuits can be filed with assistance from the Nassiri Law Group, practicing in Los Angeles, Riverside, and Orange County. Call 714-937-2020.